Correlation Between Gmo High and Franklin High
Can any of the company-specific risk be diversified away by investing in both Gmo High and Franklin High at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gmo High and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Franklin High Yield, you can compare the effects of market volatilities on Gmo High and Franklin High and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gmo High with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Franklin High.
Diversification Opportunities for Gmo High and Franklin High
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gmo and Franklin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Gmo High is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gmo High Yield are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Gmo High i.e., Gmo High and Franklin High go up and down completely randomly.
Pair Corralation between Gmo High and Franklin High
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.87 times more return on investment than Franklin High. However, Gmo High Yield is 1.14 times less risky than Franklin High. It trades about 0.27 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.0 per unit of risk. If you would invest 1,672 in Gmo High Yield on November 4, 2024 and sell it today you would earn a total of 19.00 from holding Gmo High Yield or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Franklin High Yield
Performance |
| Timeline |
| Gmo High Yield |
| Franklin High Yield |
Gmo High and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Franklin High
The main advantage of trading using opposite Gmo High and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Franklin High can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin High will offset losses from the drop in Franklin High's long position.| Gmo High vs. Fidelity Sai Convertible | Gmo High vs. Advent Claymore Convertible | Gmo High vs. Allianzgi Convertible Income | Gmo High vs. Lord Abbett Convertible |
| Franklin High vs. The Gabelli Healthcare | Franklin High vs. Blackrock Health Sciences | Franklin High vs. Alger Health Sciences | Franklin High vs. Invesco Global Health |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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